attack was spontaneous violence, the white house now says it was self-evident it was a terrorist attack. much more throughout the day. uma: indeed. thanks so much for joining us. "america live" starts right now. megyn: fox news alert, u.s. diplomatic posts under siege in what has become the new epicenter for violence and extreme anti-american protests. welcome to "america live," everyone, i'm megyn kelly. the new middle east flashpoint this hour is pakistan where angry mobs have made it their goal to attack the u.s. embassy in islamabad for a second day. turning on pakistani authorities, saying they're no better than americans because they stopped the mob from reaching the embassy. many in the outraged crowd turning rocks into weapons, police retaliating with tear gas. some officers even throwing the stones back. and in the northern cities, angry demonstrators throwing a

u.s. flag with an image of president obama as a dog onto flames chanting "down with america." one thing the u.s. and pakistani governments to take action behind the film maker behind the video, and if they do not, they threaten suicide attacks on u.s. consulates everywhere. what you're seeing may be the tip os the iceberg -- tip of the iceberg. and adding fuel to that fire, the pakistan government has called for a national holiday tomorrow for what they call peaceful demonstrations. leland vittert is streaming live from cairo where the anti-american protest movement first erupted. re rand? -- leland? >> reporter: this shows the continued anger that is out there on the streets over this video. what's interesting is that no one we have talked to either who was involved in the demonstration or who organized the demonstration has actually seen this movie, and that shows you the level at which people who want to organize extremism

are trying to use this video as a lightning rod and, boy, is it working in pakistan. dozens of people injured as they tried to storm the u.s. embassy compound there which is actually a compound inside another larger compound which the pakistani military ended up being called in to protect that area whichincludes the french embassy and also the british embassy. the u.s. marines who guard the u.s. embassy there so far, we have not heard, had to be involved in pushing any of these protesters back, although calling in the pakistani military in addition to police shows just how violent these protesters were and how determined they were. the next step, of course, inside that u.s. embassy compound would be the start burning classified material, think about evacuating people. we haven't heard of any of those steps being taken yet though we do know the u.s. embassy in islamabad is going to be closed tomorrow in part because of this

pakistani national holiday that's now been declared for these peaceful protests. also near that area in afghanistan there were large-scale protests with people burning effigies of president obama and chanting that all-too-familiar chant now that has come through the arab world in the past ten days or so, "death to america." one of the things that everybody is demanding here in these protests is that the makers of this anti-islam film in the united states be punished, or the u.s. government take some retaliatory action. we've heard from the organizer of this march here in egypt for him to be tried with sharia law meaning he could be executed for insulting the prophet muhammad. it is very difficult in this part of the world where putting anything on the internet is so controlled, speech is so controlled, you can be imprisoned for insutting us -- insulting islam. very difficult to explain in the united states we live in a democracy, and the government can't just go around punishing

people no matter how horrible what they say is on the internet. megyn? megyn: leland vittert, thank you. there are new questions today about the protests against america and the billions in foreign aid we send to countries like pakistan, libya and egypt. pakistan, where the u.s. embassy is under siege right now, got $2.1 billion from american taxpayers this year. libya, where four americans were murdered at the consulate in benghazi last week gets a little over $13 million in financial assistance, and egypt where we saw people burning the american flag, they accept more than $1.5 billion from the united states, and the obama administration would like to keep that money flowing, sending secretary of state hillary clinton to make the case to congress today where the administration's getting more and more pushback on this issue. joining me now, retired four-star general jack keane who's a former vice chief of stash for the army and a fox news military analyst. general, more and more we're hearing republican lawmakers,

and we had senator rand paul last week saying it's time to put a stop to this. why would we be funneling billions of dollars worth of aid into countries where we are seeing scenes like this? what's your thought? >> well, listen, your viewers and anybody looking at those guys on the wall and burning the american flag would have an understandable reaction, and i can certainly understand the frustration on the part of congress, but here's the harsh reality, megyn, is that every muslim country in the middle east has got a radical islamic movement in it, and, obviously, they brought that movement to the united states horrificically on 9/11. what the radicals are trying to do is topple those governments and put in place seventh century talibanism and fundamentalism. to do that, they have to drive the united states out of the region. we need to stay engaged, not disengaged. there are going to be governments in this transitional period that are elected that we may not have picked ourselves, but that doesn't mean we pull

away from those governments. i believe the aid should continue to flow to egypt. we can make it conditional, to be sure, to make certain that they're acting in terms of our national interests and mutual interests -- megyn: even -- sorry, go ahead, sir. even pakistan, $2.1 billion worth of aid in this country that was harboring usama bin laden that we hear more and more reports that they mean to actively undermine us, they set up our cia officers to fail with interrogations, and now we're seeing the storm on our embassy there? >> well, i've been saying on your show for well over a year that we should make the aid to pakistan conditional. what's horrific in that country is that they're directly aiding and abetting the sanctuaries that are in pakistan that the taliban operate out of. so long time ago we should have started to get tough with pakistan. megyn: i want to ask you, a bit of a shift, about the breaking news that we got in the last hour with the white house coming out and saying, you know, it's self-evident that what we saw in libya was a terrorist attack.

but what we heard from our u.n. ambassador over the other weekend, not this past one, but the one before, was that it was spontaneous, these were protests that got out of control from folks who were upset over a video. in libya some of the folks on capitol hill have said that doesn't make any sense, you don't have rocket-propelled grenades at some spontaneous protest that takes out four americans, and you don't have 150 people storm the consulate there in sort of, you know, oh, things just got out of control. your thoughts now on those developments. >> well, first of all, we have to be realistic about what has happened here. we have now a new chapter in the war against radical islam, and this is al-qaeda, certainly. we now have a chapter dealing with al-qaeda in northern africa, and that's going to change us to a certain degree. that means the cia and other efforts will have to chase down the al-qaeda in north africa before this thing starts to expand. i'm misttized as -- fistfy z

add -- mystify z add anybody would be, the circumstantial evidence was overwhelming, the numbers of people involved, certainly, that indicated not only a preplanned attack, but a coordinated attack, and it was the fifth one in a series of attacks that had taken place all that summer all against western interests. so, clearly, these are radicals trying to undermine the government of libya which is a new government, separate them from the united states and drive the united states out. that's what this is about. megyn: general keane, thank you so much as always. i want to tell our viewers as we saw that video, we are being told that video we were play anything the last part of general keane's appearance is video of the actual terrorists bringing those weapons, the rocket-propelled grenades, to the site of our consulate. look at this. i mean, extraordinary to actually see a terrorist act right before it takes place. but that is what we are told we see here on this video. we're going to have much more on this and the shifting

explanations over what happened in libya coming up a little later in the broadcast. well, yesterday we broke the news right here about how the protests in cairo, in egypt, may have been inspired in part by anger over what's happened to this man. he is the mastermind of the 1993 bombing of the world trade towers. remember, six people were killed, a thousand were injured here in new york city long before the september 11th, 2001, attacks. well, egypt's new president who's from the muslim brotherhood wallets this guy released -- wants this guy released. he wants him, quote, free. that is what he said. in three minutes we'll be joined by former attorney general michael mukasey. he is the man who while sitting on the bench sentenced the so-called blind cleric to a life in prison. a brand new investigative report also coming up later on president obama's life before he became a household name.

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megyn: well, to libya now where a ceremony honoring murdered u.s. ambassador chris stevens is taking place in tripoli. among those attending, libyan leadership and u.s. deputy secretary to have state william burns. earlier libya's foreign minister apologized for the attack in benghazi calling mr. stevens a friend of libya. in addition to ambassador stevens, three other americans were murdered in that assault.

yesterday intel sources told fox news they are convinced this attack is directly tied to al-qaeda and, what's more, they believe the man who led it is a former gitmo detainee. a libyan who was released from gitmo back in 2007, he was only transferred to libyan custody on the condition that he would stay in jail. obviously, that did not happen. according to another gitmo detainee, this man has direct ties, or did, to usama bin laden. fox news alert now as we look at a controversial report suggesting that the united states of america has been approached about possibly releasing or transferring a key conspirator in the 1993 world trade center bombing, said to be the mastermind of it. a man whose incarceration may have inspired the storming of the u.s. embassy in cairo just last week on september 11th. omar abdel rackman, also known

as the blind sheikh, was the spiritual adviser behind the world trade center attack, and his possible release, his release, i should say, has been called for by none other than egypt's new president, mohamed morsi, when he was inaugurated. this is a big cause for many in egypt, including their leader. yesterday a group of republicans sent a letter asking whether or not this administration is considering a possible deal for the release or transfer of the sheikh. even as the state department spokeswoman, victoria newlin, insisted that, quote, there is no plan for him to be set free. so what are the stakes here? michael mukasey is a former u.s. attorney general under president george w. bush, and he was the presiding judge at the trial of the blind sheikh back in the 1990s right here in new york, in the southern district of new york federal court, and a lot of our viewers may not know -- our viewers know usama bin laden, but this was the guy who was

behind the initial attack behind the world trade centers. >> he was also behind 9/11. he issued the fatwa from jail that authorized 9/11. he issued the fatwa that authorized the assassination of hosni mubarak for what he was tried, represented himself, in egypt. got off of that one. but he is a highly-regarded figure in some circles in egypt, many circles in egypt. and he's been a hero to a large part of that, that part of the world. megyn: why do they want him free so badly in egypt? it's not just the complete radicals. the president of egypt is, of course, a member of the muslim brotherhood, but we were told he's one of the more moderate, you know, we're led to believe that he's not one of these radical islamists. so why has he even taken it up in his inaugural address saying i want him free? >> the blind sheikh was, before his incarceration, somebody who, i think, aspired to become an

egyptian khomeini. and they want him out because he is a revered spiritual leader. megyn: i don't mean to sound naive, but that i -- do they cae about the fact that he killed at least six in 1993 americans and wounded a thousand others and now, as you point out, was behind 9/11 as well? do they care what that would do to united states/egypt relations? >> you want a one-word answer? no. megyn: do we care? because now there are reports that we were told two days before the 9/11 attacks last week that the reason these folks were going to show up at the embassy was to get him out, and these republican congressmen were so concerned about a possible deal to release him or transfer him that they wrote to the administration. now, the administration has denied that there is any said deal, but i want to play you what the state department spokesperson said and just listen, there are some caveats, it appears in the way she

phrased it. listen. >> let me say as clearly as i can, there is no plan to release the blind sheikh. there is no plan. to my knowledge, we have not been approached about it recently by any senior egyptians. megyn: there's no plan to release -- >> right. megyn: now, a question about whether we would transfer, not just give a get out of jail free pass, and no senior egyptian officials. congressman pete king has suggested they are considering that. >> and nobody recently. i don't know what she means by "recently." megyn: right. so she doesn't close the door entirely on it. how could it work, general? could we actually transfer this guy back to egyptian custody, and they would do whatever he wanted like we saw with the pan-am 103 bomber? >> we have treaties with some countries, i don't know whether egypt is one of them, that permits us to transfer prisoners to serve their time in their native country. it's only for countries with which we have treaties. i'm not sure we have one we egypt, and it's only with regard

to certain crimes. this isn't one of them. megyn: what would be the downside in doing that? is it any way that would appease the masses that took to the embassy, improve relations with a once-ally, egypt? >> all it could do is embolden the people who agree with him and who agree, frankly, with morsi's darker side to become even more bold. there is another spiritual leader there who is regarded by some in the west who is a moderate who is, in fact, as much of a flaming radical as the blind sheikh himself who would also be emboldened and empowered by doing something like this. megyn: how extraordinary would it be, and this is speculative because all we know is they are upset in cairo right now over this man's detention, and pete king actually came out and said his information is that he's been told this is being considered, but that's all we know. and then we have the state department denial with the caveats that you and i just

discussed. how significant an event would this be, and really why would we even consider it? >> i don't know why we would consider it, i don't think we should consider it, and i think the denials ought to come from the white house and from the secretary of state, and they ought to be flat, clear and unequivocal. nothing about recently, nothing about senior leaders, nothing about -- nothing that leaves any door open. megyn: based on what you're seeing now -- >> the enormity of something like that is, can't possibly be overstated. megyn: i mean, is it like releasing bin laden? >> yeah. this guy -- understand, one of bin laden's grievances that he claims led him to undertake 9/11 was the fact that the blind sheikh was in jail. this was on his top ten complaints. megyn: uh-huh. >> it would give him, i guess, some sort of posthumous vindication. megyn: i want to ask you about what we're seeing now out of libya. initially, we were told it was a

spontaneous demonstration by protesters, now we are being told this was an act of terror, and the white house has come out and said, well, that should be obvious, that it was an act of terror. is this a law enforcement matter now, or is this a homeland security matter? >> it should be a military matter. and, um, for the life of me i don't understand why it's regarded as a law enforcement matter, if it is, in fact. megyn: well, because we were told last week they came out and said it's spontaneous, the protests, and the state department said i can no longer comment on it because the fbi's conducting an investigation, and, therefore, if you have questions, bring them to the department of justice, the same department of justice you used to run. but they said the d. of justice isn't going the talk to you either. then we started to get leaks about who was really behind this, and it wasn't spontaneous, and this was a planned terror attack, and there was some heads up about it, and now they come out and say, okay, it was a terror act. does that shift it? no longer doj, now this is a

military thing that the pentagon should be talking to us about? >> correct. correct. and, um, it was -- it's obvious that, it was always obvious that it was a terrorist attack. the fact is that the ambassador's presence in, um -- was supposed to be confidential, the fact is that they knew -- megyn: got to cut you off, general, because we're going up against a hard break. thank you so much. be right back.

megyn: well, an unemployment report released this morning suggests things are not getting better on the jobs front. economists expected 375,000 new jobless claims last week, but the actual number was 382,000. that is down just 3,000 from the week before and still near a two-month high. in another report u.s.

manufacturing saw its weakest quarter in three years. now, that is interesting. i mean, the president touted manufacturing and how strong it is in this country at the democratic national convention, but it has begun to struggle as of late. you can see over the last quarter in the particularly. all of that suggesting that this economic recovery is failing to gain real traction as of late. well, we've been watching so many anti-american protests take place across the middle east, and now we're hearing concerns from america's biggest transit system that a new ad campaign set to hit the new york city subway system could add some fuel to the fire right here at home. trace gallagher has more. >> reporter: in fact, the group is called the american freedom defense initiative, megyn, and they're kind of taking it a step further saying despite the middle east, it has not changed their mind one bit, they want these ads posted on the transit system in new york, and apparently they have a

judge's backing. a judge says that the first amendment protects them. this is the ad right here. it says: in any war between the civilized man and the savage, support civilized man. it goes on to say support israel, defeat jihad. at first, the mta rejected the ads for demeaning language about islam. well, now mta says, look, their hands are tied, and the ads will begin running next week in ten subway stations in new york. now, afdi also bought ad space in d.c., but d.c. kind of played it differently. the transit authority there said that they're not running the ads for concern out of public safety. the executive director of afdi says that the d.c. authority is kowtowing, is kowtowing to the threat of jihad terror, and this is a statement from care, right? they say we are really troubled that this hate group is

dissurprising anti-muslim bigotry with support for israel. the executive director of afdi says the only thing they hate is violence. listen. >> i am saying jihad, i am not saying all muslims, and anyone who says this ad is against muslim is the the true islamaphobe. they're saying all muslims hate jews and israel, and i don't believe that. >> reporter: these ads also ran on buses in san francisco, but that city put disclaimers next to them saying they do not support the ads, and all the ad money that was generated on those buses was donated to charity. but beginning next week the ads go up in ten subway stations in midtown manhattan. megyn? megyn: all right, trace, thank you. big new questions today about the hidden camera video of mitt romney released in such a way that a critical part of his remarks were apparently missing in the first version, and then another two minutes is also missing from the final version

even though we were told we were getting the complete, complete video. just ahead, we'll look at how this was intentionally edited and why. and a new ad airing across a critical battleground state features the israeli prime minister calling on the united states to take a tougher stand on iran's nuclear program. we'll debate why this message is running now and is significance of where it is running. >> the world tells israel, wait, there's still time. ♪ >> and i say, wait for what? questions? anyone have occasional constipation, diarrhea, gas, bloating? yeah. one phillips' colon health probiotic cap each day helps defend against these digestive issues with three strains of good bacteria. approved! [ female announcer ] live the regular life. phillips'.

megyn: fox news alert as the unbelievable protests we saw unfold in pakistan continue with renewed energy and increased numbers. look at the screen. protesters burning effigies, american flags and more today in a second day of increasingly violence showdowns there with police. here was the scene yesterday at the u.s. embassy. look at this. as protesters nearly tore down the heavily-guarded gates. we've had no reports of evacuations, but that embassy was shut down a few days ago with staff placed under some serious travel restrictions as embassy documents were burned to prevent them from falling into the wrong hands. ♪ >> the world tells israel, wait, there's till time. -- there's

still time. and i say, wait for what? wait until when? >> the world needs america's strength, not apologies. megyn: a big development on the campaign april as us rail -- trail as benjamin netanyahu finds himself the star of a new political ad discussing iran. it is airing in the key swing state of florida. the ad does not mention either president by name, it is created by the nonprofit advocacy group called secure america now. the full ad buy is reported to cost $1 million, so what is this about? and what does it mean for the white house race, if anything? bernard whitman is a democratic pollster and author of "52 reasons to vote for president obama," and marc thiessen is a former speech writer for president george w. bush. and i want to -- we're going to get to another topic today because something we've been

talking about with marc for more than a week now, couple of weeks has been a major development with the president and his daily intelligence briefs, um, and we're going to talk about that in a minute, but i want to start with this ad. it's no accident, bernard, that this is airing in florida where the jewish vote is significant, and not just the jewish vote, but the sort of pro-israel vote. and so, clearly, it seems aimed at those voters. but does it help one side or the other? >> well, it's certainly meant to try to help mitt romney. in fact, it's a desperate and, i think, quite inappropriate attempt to scare people and distort the president's record. the fact is, megyn, that barack obama right now is killing mitt romney among jews, nationally he's at 70-25%, it's virtually the exact same number that he was four years ago in this time and about the percentage that he won. so i think it's also misleading because benjamin netanyahu made it clear earlier this week that, in fact, he stood with president obama.

and when asked if he agreed with mitt romney's assertion that america's throwing israel under the bus, netanyahu pointedly replied, there is no bus. the president has made it clear that he stands by israel, will defend israel at all costs and, in fact, believes in the only solution that is appropriate here, and that's a two-state solution, something which mitt romney clearly does not respect in and doesn't respect the palestinians to even start to be an honest broker there. megyn: marc, why are you laughing? >> because it was laughable. i mean, look, this president has no intention of doing anything about stopping iran's drive for a nuclear weapon and, two, he has nothing but complete distape for israel -- disdain for israel and its leaders. this is the president that announced last year any deal has to be based on the 1967 lines without warning israeli leaders over the objections of his senior advisers and in a speech that was specifically timed to preempt prime minister netanyahu's speech to congress.

this is a president who was caught trash talking net an netu with the president of france, sarkozy, said you can't stand him, i have to deal with him every day. he was caught on camera saying that. this is a president who doesn't have time to meet with netanyahu when he asks for an emergency meeting but does have time to party with jay-z and beyonce in new york. and the fact is, on his watch iran has made more progress toward a nuclear weapon in the last three-and-a-half years that they have made since the three decades of the iranian revolution. they have more high-enriched uranium, more hardened nuclear facilities, and this is an existential threat to israel, and he has utterly failed to stop that drive towards a nuclear weapon, and jewish voters are starting to understand what a palestinian leader told "the washington post": obama has a total lack of an emotion-based relationship with israel. he doesn't have israel's back, and it's a perfectly legitimate ad -- megyn: go ahead can, bernard.

>> marc, the fact is this president has done, actually, more to try to thwart iran's march towards nuclear weapons than any president in history, including george w. bush. he did not put sanctions on oil sales. this president's done more to try to thwart that, and i think that israel understands that. and i think the american-israeli population does. look, i'm a jew, i believe in a two-state solution, and i also believe trying to inject a foreign leader into an american political campaign is inappropriate, it's wrong. i think benjamin netanyahu would not be amused that he is being used as some sort of a toy by romney -- megyn: well, that's not fair to say that it's by romney. >> that's ridiculous. megyn: we don't know who's behind the ad. >> he asked the president to draw a red line, and he -- and the president has refused to do it. he had a screaming match, apparently, with the american ambassador over these differences. so all the happy talk that you cite about how everyone is getting along and obama has

israel's back, netanyahu doesn't -- megyn: let me ask you this, marc. then, if that is the case, bernard accurately states the numbers in terms of president obama's support among jewish voters, so if it is as you say, it doesn't seem like it's resonating with jewish voters. >> it's going to resonate because this is why you have ads, this is why you put these issues out there. and i think it will resonate with jewish voters and, listen, the fact is the majority of jewish voters in this country are democrat, they always have been. but if obama loses even a small fraction, it could make the difference for him in florida, very important -- megyn: they don't vote, jewish voters don't vote baylesed only on israel -- based only on israel. >> absolutely. megyn: there is a separate ad put out by the republican jewish coalition, the $5 million ad aimed at voters in the swing states. i want to shift to this other topic because marc thiessen, he's a columnist at "the

washington post" as well as his many appearances here, and he criticized president obama for not getting his daily intelligence brief. he gets it via paper, but unlike president bush as marc pointed out, he has not been receiving it in person with his advisers and analysts, you know, telling him about intel including in the week prior to these attacks we saw in libya and now, and so you came out with an article about that, marc. here was the white house's response to your article. >> finally, who does get the presidential daily briefing if he's not there? >> i saw that report. it is, it is hilarious to me -- >> [inaudible] >> he gets it every day, okay? the president of the united states gets the presidential daily briefing every day. there is a document that he reads every day when he is not -- well, he always reads it every day because he's a voracious consumer of all of his briefing materials. as president -- >> [inaudible] >> i believe the article written about it was, um, amusing.

megyn: and now we have an update, marc. you want to update our viewers on what he's doing now. >> absolutely. well, as i reported in my washington post column, he has skipped his daily intelligence briefing more than half the time since taking office, and in the week leading up to the crisis in libya and the attacks in libya and egypt, he missed it every single day for a week. since we published those articles and talked about this on the air last thursday, he has attended his presidential daily briefing for five days in a row. and we looked at the schedule, we looked at the numbers today. the last time he attended the presidential daily briefing, the intelligence briefing five days in a row was in february, seven months ago. so i don't think it's a coincidence that suddenly he's gotten a new interest in spending time with his intelligence briefers. and i think it has to do a lot with the reporting you've done on this and together. megyn: all right. well, we'll let that be the final word. marc's reporting got a lot of attention, so we wanted to

update the viewers. bernard, marc, thank you. >> thank you. megyn: the white house is now arguing that it is, quote: self-evident that the attack on our libyan embassy was an act of terrorism. ed henry joins us shortly to see how this message stacks up against the other comments we've had from the administration in recent days. and a stunning new report on the number of americans who will now face a tax penalty due to the president's health care law. it is millions more than they first told us. that's next. [applause] >> but we have to pass the bill so that you can find out what is in it away from the fog of the controversy. ♪ [ male announcer ] you've reached the age where you don't back down from a challenge. this is the age of knowing how to make things happen. sowhy let erectile dysfunction get in your way? talk to your doctor about viagra. 20 million men already have.

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and, using state-of-the-art monitoring technologies, rigorous practices help ensure our operations are safe and clean for our communities and the environment. we're america's natural gas. to start her own interior design business. she's got a growing list of clients she keeps in touch with using e-mail marketing from constantcontact.com. constantcontact is easy and affordable. it lets her send out updates and photos that showcase her expertise and inspire her customers for only $15 a month. [ dog barking ] her dream -- to be the area's hottest interior design office. [ children laughing ] right now, she just dreams of an office. get a free trial at constantcontact.com. megyn: well, a major report out today from the congressional budget office that shows six million americans, which is two million higher than first

estimated, will face some serious financial punishments under the president's health care law if they don't buy the mandated health care coverage. a reality that represents some $3 billion more in penalties than we were first told about and can a 50% increase in the official estimate of how many uninsured people will have to pay. lou dobbs is the host of "lou dobbs tonight" on the fox business network and loudobbs.com. lou, this is a hefty penalty that now we're being told is going to hit six million americans, and the reason it's so controversial is because the additional two million americans are not rich people. >> yeah. the 1%ers, as it were. in fact, they're closer to the 1% at the bottom of the income scale. as you say, 50% more will be paying these penalties, and the idea that six million people will be hit with this, middle class people, we're talking about -- and one of my favorite numbers from the congressional

budget office as we talk about the middle class are going to be decimated by in the, just stuck down here at the bottom with under twice the poverty level 600,000 taxpayers, that means folks making $23,000, will be hit with these penalties. they will be taxed according to the obama/roberts -- [laughter] health care law. the idea that this would happen is unconscionable for any administration, republican or democrat. megyn: you're talking about people who make 20 grand a year -- >> 20 grand a year could be hit by it. megyn: the majority of folks are $55,000 for an individual, $115,000 for a family of four or less. the president said he wasn't going to raise taxes on anybody who madeless than 250 for a family. >> we don't have enough hours in the today's broadcast schedule to go through all of the promises that have been broken

on obamacare. but this is one of the most painful because it does attack the middle class and the poor. and think about this, megyn, these six million people who will be hit with these penalties averaging $1200, that works out to an entire week's wages after taxes, after deductions for someone making around 55,000. this is, this is serious stuff. megyn: the thing about it is having been a poor person at various points in my life, the reason you don't buy health insurance is because you can't afford it. it's, you know, most people, it's not that they don't want it, it's just that you have to do a budget, and it gets eliminated because you can't afford it. you have to buy food and pay your mortgage or your remit. >> exactly. megyn:ing so what will happen to these people who have found themselves in that position is they'll get slapped by a $700-$1200 fine by the government at the end of the year. if they pay it, it doesn't get them health insurance, it's just your penalty for not paying the bigger expense of buying actual health care coverage. >> and the idea that this is

coming from are a government that, well, says they're here to help. one of the great three lies is the government is here to help. and this is a disastrous consequence of unthought out, irresponsible, capricious public policy making. megyn: but is the irs really going to go after people who don't pay this penalty? >> the great thing is the irs is led by intelligent, thoughtful people with a sense of proportion. they have said, the head of the irs has said we're not going to go after these people. we will where necessary, you know, we'll deduct whatever it is from your refunds, but they're not going to go after people. and i say, good for the irs. megyn: that's right. if you're a middle class worker, you don't want the irs to be making you pay this fine be, but the whole law, obamacare, is set up based on this sort of financial input from the people. so what happens to obamacare? what happens to -- those fines are supposed to fund this, in part. >> obamacare's not often fond of

enforcing laws of any kind. but in this instance they are actually defeating the purpose of obamacare itself. that is, there'll be about 26 million people who can file for hardship, unions are getting waivers, illegal immigrants get waivers, the middle class gets clobbered under obamacare. megyn: if you're low enough, you can get covered under medicare. >> to the a degree, yes. this is a square shot straight at the middle class and one of the most dramatic and, i think, really perhaps most dangerous breaches of promise by this president on health care and not raising taxes. megyn: well, we'll see. these health care plans, even though they're cheaper than they would otherwise be without the government supplement, they're not that cheap. talking a few thousand dollars -- >> an individual -- megyn: to buy a health care plan. >> an individual most likely now is paying $4,000 for an individual and on average $15,000 for a family of four,

and that isn't changing even though the president said it would. megyn: it's a lot of dough. lou, thank you. >> great to be with you. megyn: in just the last hour, a judge has wrapped up what we are told was a critical hearing in the movie massacre case out in colorado. plus, the riots in the middle east and questions about the ever-changing stories on who and what is responsible.

megyn: fox news alert, we got word in t the last 15 minutes that in the wake of the attack in libya, secretary of state hillary clinton calling for an accountability review board now to study what happened in benghazi saying this board will be chaired by retired u.s. diplomat thomas pickering. mrs. clinton is also visiting congress today hoping to beat back tea party pressure to cut foreign aid to libya and egypt

in the wake of last week's protests and violence that we saw. conservative republicans are demanding the obama administration rethink it's financial support to libya, egypt and pakistan. you heard general keane saying perhaps they could consider conditioning the money, if not revoking it. republicans arguing they have not lived up to their commitments as partners to america. new obstacles today for the prosecution in the trial of the suspected colorado shooter, james holmes. for now prosecutors are giving up their fight over what they call a critical piece of evidence in the trial of this man accused of one of the worst mass shootings in u.s. history. dan springer has the details live in centennial, colorado. dan? >> reporter: yeah, megyn. we were expecting a long day in court, but it was over in 90 minutes when, as you said, the prosecution surprisingly dropped its efforts to get their hands on that notebook that was sent by defendant james holmes to his psychiatrist at the university

of colorado, dr. lynn fenton, the day before this rampage. the prosecution had said they were going to fight all the way to the colorado supreme court if necessary to get that notebook, believing that it could, basically, contain the confession. but today they dropped their efforts and surprisingly, a former district attorney here in colorado said that it was actually a bad day for the defense because this takes away a very appealable effort that they could use to delay this even further. and so the other big development, basically, was that james holmes looked like a different person in court today. gone is that orange hair, long wild-looking orange hair and replaced by short, cropped brown hair and a short, cropped beard. so he looks like a different person. he was very attentive today, but this could speed up the proceedings, they could actually get to the preliminary hearing in november as is scheduled now. megyn? megyn: dan springer, thank you. in developments out of pakistan -- new developments out

of pakistan, the pakistani government opens the door to each bigger protests in the next 24 hours. and new questions, next, about the secretly-recorded video of governor romney from may and what was left out intentionally of the first version released to the public. that's right after this break. >> government has responsibility to care for them, who believe they're entitled. look, i don't play 'bout my facial hair.

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megyn: fox news alert. the new video as the u.s. embassy comes under siege in the country of pakistan. we are seeing angry mobs turning on pakistani authorities, trying to attack our embassy in islamabad. the state department out with a that wide-spread unrest could pose an increased threat for americans in pakistan.

advising americans everywhere not to travel to pakistan unless absolutely necessary. we are working with our sources and will bring you the developments as they happen. new developments in that countries investigation. we have seen different accounts from libyan officials about who was behind the assault and the circumstances of it on our consulate in benghazi. that left u.s. ambassador christopher stevens dead along with three other americans. sources told fox news they are convinced this attack is directly tied to al qaeda. the state department refused to go that far days ago. libyan officials say 50 suspects have been arrested and gregg

palkot is live in tripoli, libya where a ceremony honoring chris stevens is wrapping up. he's with us by phone because they are under a security blanket as u.s. officials leave the area. >> reporter: they are scrambling our signals. we heard strong words coming at this memorial ceremony. here is a quote from the libyan president. we'll redouble our efforts. we'll get the culprits. the culprits associated with the killing of ambassador chris stevens and three other americans. but who are the culprits? we are speaking to libyan officials today. the prime minister today saying that 8 libyans are the latest to be arrested in association with the killings. they are also talking about foreign element. they are talking about a group suspected to be involvedn with

it all al-gama'aal sharia. and we have been hearing a lot from around speaking of the more shown taken was attack. fax news has been reporting the past hours about a man with a guantanamo background with al qaeda links and links to the militants and the revolution in libya. we have been asking around in the past few hours about this man. what we can tell you is he is a man being mentioned here in libya. he's a man wanted by the authorities. that is certainly the fbi will be looking into. we have been speaking to them. their investigation is full on right now. agents at the state department is confirming are on the ground in tripoli and they are set to go on to benghazi the next day or so where in fact the killing

happened. again, deputy secretary of state williams burns speaking today talking about the courage, the passion of this man. a true advocate for what was going on here in libya, american at it best. megyn: the white house is arguing it's self-evident the attack on our libyan consequence that was an act of terrorism. ed henry is with us live from miami where the president is campaigning. >> this is another example of the administration's account of what happened in benghazi unraveling. the department of defense had to walk back details of its account. the state department had to walk back details where they claimed there were no libyan security guards in the inner sanctum of the consulate. they had to walk that back and

say there were libyan guards which is significant because there are questions about whether the libyan guards turned on our ambassador and other americans and that led to their death. what is dramatic today is just 24 hours after jay carney was telling reporters all of this that it was too early to classify whether this was terror or al qaeda was involved. jay carney told reporters it's self-evident this was a terror attack. different from what the administration has been saying. what changed in the past 24 hours? bret baier had exclusive reporting suggesting u.s. intelligence sources believe it was a terror attack and al aeda might have been tied to it. you had the head of the national terrorism center testifying on capitol hill telling lawmakers he believes it was a terror attack. different from what the white house was saying. also this is different from what

ambassador susan rice was telling chris wallace this past weekend. it led to this interesting exchange with victoria nuland and james rosen. >> i'm not going to put labels on this until we have a complete investigation. okay? >> reporter: you don't regard it as an account of terrorism? >> i don't think we know enough. we'll continue to assess. we'll have a full investigation now and then we'll be in a better position to put labels on things. >> reporter: republicans are privately saying they believe the administration has not had a full account of this because they don't want to admit there was a u.s. terror attack on the 9/11 anniversary because this happened at the u.s. consulate and it happened one day after the white house put out a press release september 10 saying the president had a meeting with top security officials to increase our posture a u.s. facility around the world because of the

9/11 anniversary. the white house said they didn't want to jump out there and classify this as a terror attack because they didn't want to get ahead of the fbi investigation. republicans believe something else is going on. meg are ed henry, thank you. new questions this hour about the hidden camera video of governor romney at a florida fundraiser in may and questionable edits in a video we were told is complete but as it turns out is not. the story broke tuesday when the mother jones web site posted a 4-minute clip of a 4-minute video of governor romney speaking to supporters six months ago. he talked about president obama supporters, 47% of the country saying they wouldn't support him. and he talked about the middle east peace process and he has been reamed about what he said about the peace process.

but was that fair and did the tape reveal all of his comments? here is how one show covered that second part of the story. >> so there is the governor ball from bane saying israel, that the unsolvable problem of my presidency. i won't even try. marie, we have never had a candidate who could ever be that stupid in front of five people let alone 150 people. >> it's true. for someone who constantly accuses the president of throwing israel under the bus, he's like throwing israel under the bus and driven away at high speed.

he's been presented with a problem and decided he doesn't want to deal with it because it's unsolvable. megyn: but that original clip of governor romney left out a key part of his comments on that subject. here is the extended version of what was cut out. american strength, american resolve. we should point where they want peace. that's where we can have a discussion. until then, it's just an unsolvable thing. megyn: chris stirewalt, host of the power play on

foxnews.comlive. >> he goes on in that second clip to say that peace -- that american strength and american resolve will cause the palestinians to some day reach the point where they want peace and agoes on from there. is that deceptive editing? i don't want to put it on lawrence o'donnell. he got that tape from mother jones and he admitted to with holding that part of the tape. >> there is a section in it where they say the recordings didn't work and there are a couple minutes missing. that was the original missing two minutes. this was an edited bit that was released earlier and lingered for 36 hours that was out there driving the discussion as it related to this that excluded the part that when put together with what was released is a totally non-0 controversial position on the american right. this is a republican position.

this is what mitt romney's party basically said which is do not give concessions to the principles, but instead, bring them to the negotiating table once they are finally ready to submit to free and fair negotiations. that's the republican position and it's not that controversial. for the way that it was cut. the way the edit was made, it made it sounds like mitt romney didn't care, wasn't trying. megyn: here are a accumulation headlines that hit the news cycle after they released this tape. cbs, romney says middle east peace is impossible. abc, no way there will be peace. boom berg, romney told donors no way and peace. he goes on to say, american strength, american resolve will cause the palestinians to some day reach the point where they want peace more than us trying to force peace on them. we have been talking about the media narrative. this is another day in the same

thing. >> 3 or 40 hours after it's been out there knocking him over the head. in hindsight i guess that wasn't what he said at all says a blog posting somewhere that isn't much read. megyn: david corn from mother jones says, well, i needed to cut the tapes somewhere. and those additional remarks did not change the nature of what romney was saying. really? does he get to decide that? he was on msnbc discussing this and he didn't say there is more that i didn't include that may add context. >> the fact that the narrative turned into this giant thing even as that 47% thing was going on. this became the second note in that story. those headlines are so stark. the question was not asked which was this. is there more to this tape, can we see the rest. megyn: mitt romney suggests they

posted snippetted and david corn tweeted out. not true. he said no, see for yourself. now we learn that a full one to two minutes may have been edited out of that 47% section of the tape. so we leave with you that. right after this break, liz cheney on the ever changing stories about libya. woman 1: this isn't just another election. we're voting for...

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find out with the aarp voters' guide at earnedasay.org megyn: the white house issuing a significant statement in the last hour on the embassy attack we saw in libya saying it is self-evident that the attack on that consulate was an act of terrorism. 10 days ago we were hearing the attack involved what we were told was a spontaneous unplanned protest. despite video that shows men carrying rpgs be rocket propelled grenades with no sign of any protest going on.

that's what catherine herridge reported. that there was and the protest going on to any significant degree prior to the attack that took the lives of four americans. now some americans are asking if the white house is playing politics with national security. liz cheney is a former state department official and fox news contributor. they said it was spontaneous, it was not preplanned. the libyan president is saying it is an act of terror. it is preplanned. they said he don't know as much as we know. and now today they say it's self-evidence it's an act of terror. which is it? >> the real question is when is this white house not played politics with our national security. when you have these rpg attacks, they were firing mortar rounds into the embassy. there was a four-hour firefight going on. it's preposterous to say that was a spontaneous eruption of

anger about this movie. clearly it was a terror attack. the white house wants the american people to focus on the fact that the white house ordered the operation that killed bin laden. he killed bin laden therefore the war is over. what's happening across the middle east tells you al qaeda is strong, they are resurgent. there are reports that al qaeda affiliates were involved in the attack. and it tells you that in fact the white house efforts to claim credit for somehow ending the war on terror for putting all of the attention and focus on killing bin laden is not the whole story and the american people need to understand we are still at war. >> let's just imagine the initial headline was al qaeda successfully launches a terror attack that kills our american ambassador and three others.

the president puts it in perspective and says what we are going to do in retaliation. so bill hemmer had the press secretary for the obama campaign and he asked him if we are going to hear from our president now. and i want to play for you how ben lebolt responded. >> governor romney weighed in before he had a full set of facts about a developing situation. we are not going to do that. the president isn't somebody who shoots first and end later. >> we have had an attack apparently by al qaeda that resulted in the result of four diplomats. for the president of the united states -- first all he went out into the rose garden and condemned what happened in libya. didn't mid-atlantic attack on our embassy in egypt. and flew off to las vegas for a fundraiser. not mentioning the attack on the embassy in egypt immediately sent a signal across the region.

we they have the sense they can do it with impunity. the u.s. president doesn't even condemn it, apparently. megyn: we mentioned the trip to vegas. and we talked about that with contributors who said that probably wasn't the smartest move by the president to literally the day we found out these four diplomats had been murdered he was in vegas asking for fundraising help. but he's also in the past few days done fundraisers with beyonce and jay-z and gone on letterman. look at pakistan with the gates to our embassy and the destruction of american flags and chanting "death to america" in so many spots across the globe. what message do it send? what should he be doing? >> at best you can say he's awol

on this. what you have seen happen in the middle east is the result of the policies of the last 3 1/2 years. the response is satin was of the policies. if you listen to his own words. he came into office. he said any world order that elevates one nation above others cannot survive. he does not believe american should be aseason dent in the world. we are seeing what happens when you have got a weakened america. no one in the middle east is saying what will the americans think, what will the americans do. i hear from my friend and contacts in the arab world. you guys have made yourselves completely irrelevant. it's hard to imagine a worse situation than america being irrelevant. megyn: was it a move to say it was spontaneous as opposed to

some terrorist group out to kill american diplomats. to think there is a conscious motivation to play politics with terror in this country then we have gotten to a scary place. i want to challenge you on that and we'll talk about it after the break. you know why i sell tools? tools are uncomplicated. nothing complicated about a pair of 10 inch hose clamp pliers. you know what's complicated? shipping. shipping's complicated. not really. with priority mail flat rate boxes from the postal service shipping's easy.

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megyn: why can't it just be the administration was acting on its initial information that it had a creepy video that led in part to some of these protests and that was their best information as opposed to a conscious decision to mislead. >> if you look at what susan rice said when she went out on sunday, it was complete confidence, this is because of the film. even if you give them the benefit of the doubt you would

have to be saying at a minimum, we cannot tell you exactly what the causes are. that's not what she said. megyn: that's what we are used to seeing with these administrations. more caution. it's an ongoing investigation. what we think right now. but it wasn't hedged that way. >> i think part of that is because their foreign policy national security record is abysmal. they do not want the american people to dig too deeply into their record. it's more convenient for them to blame it on the film. it's not because al qaeda is resurgent and we are still sat war. we now know al qaeda is operating and has attacked across north africa. this president has no program in place for terror. he has no way to get information if he captures a terrorist.

if you know we are facing a war that's going to require heavy active intelligence component and we have no way to interrogate a terrorist. what's in the computer, what's in his pocket. they have fallen down on the job here. megyn: what extent do we need to be concerned if if at all. about this movie showing the tale of the killing of barack obama. we are told the white house cooperated to an unprecedented extent so they would have the details of the operation. you see niece protests out there. they are so upset in part about this antimuslim film. now we are going on the big screen with a film reenacting the assassination of their leader. do we need to be concerned? >> what concerns me about that film is where you started the segment today which is the politicalization of our national security.

we have a situation where the white house cooperated apparently aggressively with her. gave her information it shouldn't have to make the president look good. we saw the same thing happen with respect to the cyber war program in iran that was apparently having some success. some effect. according to the "new york times." senior members of the president's team who were in the room. those are the words. joined the deliberations about that program. briefed the "new york times" about it and you end up with front page stories. isn't president obama such an amazing decisive national security leader based on the leaked information. they are doing tremendous damage to our national security. nobody has been held accountable. senior members of the president's national security team on a program that highly classified is a handful of people. i think the american people need to know was the president in the loop on this? did he authorize the leak? megyn: liz cheney, always good

to see you. there are four big polls out with banner headlines suggesting president obama's campaign is taking off and mitt romney d.o.a. but if you look at the fine print there are many questions about if that is what's going on or if that is just the mainstream media narrative. up next two experienced campaign managers, ed rollins and joe trippi is here. we heard it was a mistake when health and human services kathleen sebelius broke a federal law trying to campaign for her boss on the taxpayer dime. should she be spared any penalty? she says she should. an unbelievable video of what happened when police look up from a traffic stop and see an out off control van headed towards them.

megyn: police officers respond to a car accident only to narrowly escape a second accident. you can see a van hit this police cruiser. one runs. other pushes the woman out of the way. bet those two cops had a discussion about that reaction after. they were treated for minor injuries. the driver of the van was arrested and charged with dwi and aggravate assault.

four brand-new polls by major media networks each paired with banner headlines suggesting the president is riding high. this from the business insider. obama crushes romney in the new poll. close in clol. from the associated press. when you dig deeper there are questions here and the polling, well be you know ... the polling. joining me to discuss it is ed rollins. and joe trippi who is a former howard dean campaign manager. joe has a long history as well which we'll get into later. but joe has done a lot of impressive things. i just want to give the viewers

a sample. the latest pew poll has romney down 8 and president obama up 8. but at the same time gallup showing it within a point on a national basis and rasmussen comes out which shows romney up 1 point in the swing states. i'm so confused. i don't understand this. how can it be in the rasmussen shows romney up 2 nationally. how can he have him up and pew has him down 8 and the swing states are neck and neck. >> i wouldn't even be looking at the national trend polls. first all they don't matter that much. and they are also close. we know it's going to be a close race. megyn: the mainstream media is telling us it's not. they are telling us romney is dead. >> where it's not looking so close is the swing states where the polling does matter. if you look at polls in ohio and virginia, in the states where this will get decided.

nationally he could move up 4 points in california. who cares. it's 10% of the country -- megyn: californians and new yorkers and the blue people come out and say yes, yes yes. even fox news had a poll out that showed a big lead for president obama in those critical swing states, in florida, virginia and ohio. yet rasmussen is showing a much tighter race. >> it's apples and oranges. it's a question of who you are measuring. it's not a perfect universe. some of these oversampled democrats. some of them undersampled. you should measure one poll against another poll. look at gallup poll and see if there is movement within the same organization. but we don't do that anymore. we have so many polls that basically you measure everything. the campaigns have their own polling. both campaigns will tell you this is a dead-even race.

it's a 3-4 point differential. bus they say 95 out of 100 times. every once in a while you get scene outlier in which the poll can be 10 points off. but at the end of the day the polls try to tighten up and get it perfect. today you have got a dead even race. the states that matter either side can win. >> this thing is about following the trends. and the trend within that news organization or polling organization. so the fox poll. what has that trend been in virginia? is it widening? is the lead fox is reporting or pew is reporting widening or closing? that matters. the other thing that starts to matter. you look at all the polls and they are all trending the same way. even if they oversampled more dems or more -- is that same organization oversampling too many "d"s but they have been

doing it the whole time and where romney is closing. that telling. >> if i just spent $20 million on television and lost 4 points i would assume my ads aren't any good. megyn: you talk about the oversampling of one party over the other in these polls. karl rove was on o'reilly trying to make the point with this famous white board. >> 2008 the election exit polls had 7 points more democrats than republicans. big gleft decades. in '04 it was dead even and a 3-point having for the democrats in turnouts. who thinks in this election that there are going to be 13 points fewer republican turnout than democrat? >> why do the polls do that? >> they simply take a poll, take whoever they get during the time that they are taking the poll which could be a friday or saturday night.

>> whoever answers the phone when write it down, they don't try to balance it out. >> my friend carl has a point but there is also a counter point to that. if you look at what he's saying, 2004, there was no plus 3, in 2008 it was plus 7. the 2004 election if you kept doing that would never have shown the 2008 turnout. they don't connect. now looking back and saying look what happened in 2008 -- >> here is my theory. they are both parties are actually declining. and for some reason people who say they are republicans declining faster than the democrats. more people this year associated with both parties. >> people who identify themselves as independents, which are a flurlity of all voters. but they are not really

independents. they lean. so what you do is push them into the couple. there is probably 4% to 5% that's independent and undecided and they may be the issue that decides this. megyn: do you think we poll too much? the american public sits at home. they don't want to back a loser. if they think the guy they are inclined to back is a loser, was it always this way or would you be better off, took two candidates, debated. tried to bring their message out and we didn't have pollsters telling us who was the wish or loser. >> if i could do one thing i would ban polling as an operative. one, the candidates can go, what should i say on this subject, let's look at what the poll says. so it does take leadership out of both sides. and we are all playing the poll game. unfortunately in our society we can't. megyn: do you believe that with the polls like they are now.

look at the fox news poll. 7 points ahead. do you still think governor romney could win? you start to look at the big number and think can he win? >> i ran christie whitman's race and she was 25 points ahead 5 weeks in and she won. these races will close up. my sense is five states that romney has to win, he doesn't win those states he won't be nominated for president. >> i did a race in virginia where we were 31 points down with 1 state days left to go and we turned it around. megyn: how? >> you can. megyn: how did you do it? >> you have to look at your polling and what's going on and be willing to say we have to change. that's the thing that will happen. both these campaigns are looking at their own polling. >> who is going to turn on

election day. that's the key thing. megyn: barack obama has been saying, you have got to show up. they need turnout. thank you both so much. we were told just yesterday that health and human services secretary kathleen sebelius made a mistake when she broke a federal law. is that the verdict or should there be a penalty? "kelly's court" takes it up next. to compete on the global stage. what we need are people prepared for the careers of our new economy. by 2025 we could have 20 million jobs without enough college graduates to fill them. that's why at devry university, we're teaming up with companies like cisco to help make sure everyone's ready with the know how we need for a new tomorrow. [ male announcer ] make sure america's ready. make sure you're ready. at devry.edu/knowhow. ♪

megyn: "kelly's court" is back in session. on the docket today, an inadvertenterror of the hatch act by kathleen sebelius that prohibits administration officials from campaigning in their official capacities. this conclusion is she is unlikely to face any punishment for breaking the law. it happened earlier this year at

an he excellent charlotte, north carolina where she made some comments which we'll get into in a minute. then the u.s. office special counsel revealed she was in fact campaigning for president obama while on official business. she is not suppose to be doing that because taxpayers foot the bill for that. here is the white house commenting on her violation of law yesterday. >> did the president have any response to the office of special counsel report on secretary sebelius violating the hatch act? >> i have not spoken to him about it. i think secretary sebelius responded to that and made sure what was -- her remarks were ex tell prayer was. the health and human service has reclassified the event to meets the correct standard and the u.s. treasury has been rei reimbursed and she has met with

experts to make sure this never happens between. the error was acknowledged by the secretary and promptly corrected and no taxpayer dollars were misused. >> as far as the president is concerned that's the end of the matter? >> it's safe to assume action has been taken by the secretary and the department to remedy the inadvertent error. megyn: joining me. arthur aidala and mercedes colwin. she is not getting any punishment, that's the way it appears from that exchange. >> i think it's astounding they say it's an inadvertent error. we make sure that in november he continues to be president for the next four years. megyn: does that sounds like an error to you?

>> did i just say that? come on. can someone get a reality check here? this is not an error. it was designed. she knew exactly what she was saying and she said it with an emphasis. she was emphatic. in november make sure he's there and president for the next four years. not an error. then she went on to say it was technical and minor. she wrote a letter saying these are not the type of violations the hatch act is meant to address and it seems unfair to conclude that as a result of my offhand statement i used my official title for political purposes. >> with the hatch act an appointed official, someone appointed by the president and confirmed by the president, they are allowed in their official capacity to make political statement as long as it is not an event being paid for by the united states taxpayers. that's why immediately after the

event, as soon as she heard there were complaints they reclassified this and the democratic national committee paid the money back. megyn: it wasn't immediate. it was after somebody complained and she got caught. she got caught. >> i heard she had to sit with an ethics panel. if someone is charged with sexual harassment and they are good employees and have never done anything wrong and this is the first time she has done this. they go to sexual harassment training. >> she is a sophisticated politician. she did something deliberate. she got caught. if she was smart she would say i understand there have been some rumblings about what i did. once she gets the official word from the office of the special council that she violated the match act -- megyn: apparently they returned the money.

they said sebelius and hhs returned the money to treasury that was used to fund this appearance. hhs returned money? isn't that us still? >> it's taxpayer's money. >> reuters reported the democratic national committee paid back the money. that would be wrong if that was the case. megyn: the reports said the dnc picked up some of the cost, not all. >> what should happen? >> couldn't she be fired? this happened to president bush, didn't she get fired or she was forced to resign? >> termination or suspension. >> i don't think this rises to that level that the president who is pleased with her performance up until now is going to say you are out because of this. megyn: she did write saying she believes she should suffer no punishment. it looks like that's the way they are going to go. >> it sounds that way since they

class fight as an inadvertent error. i don't know how they can say that. megyn: thank you for educating us on the hatch act. >> nice research. megyn: moment ago we got surveillance video of the incident involving lindsay lohan.

megyn: all those mug shots of such a young woman. new york city police arresting lindsay lohan outside a hotel in manhattan. she say she clipped a pedestrian and left the scene. it's just latest run-in for the

troubled star with the law. trace gallagher, it usually happened in hollywood. >> reporter: she was outside a hotel in new york city. we have a shot of the guy at the top. he is the guy she allegedly hit. she hits the guy in the leg. she comes right here. right here. the guy apparently says she hit his leg. as the car goes forward you will see the guy walk after her. he goes down after her. he asked her what was going on, and he said you have got to get out of the way. the new york cops said she fled the scene. they said she was not intoxicated but they did not test her. if she did flee the scene it could be a probation violation. she is on probation for stealing that necklace. she clipped the guy. he wasn't badly injured but

apparently he was injured says ray kelly. she could add to her mugshot portfolio we have seen so many times. she has been arrested 20 times. she has been in jail 6 times in the past five years. her mom must be very proud. her mom was on dr. phil and dr. phil asked her about the daughter's legal problems and she gave dr. phil the finger on national television. megyn: her percentage is pretty good. >> reporter: are you a lawyer? megyn: i didn't do criminal law. i thought i was going to do the show like this yesterday. this is much more comfortable and citing upright.

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